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How Trump’s Budget Would Cut the Social Safety Net

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As a candidate, President Trump said he would not cut Medicare, Medicaid or Social Security. But his 2019 budget proposal seeks to reduce spending on all three programs and other parts of the social safety net.

The White House budget for 2019 proposes to eliminate $554 billion in Medicare spending and up to $250 billion in Medicaid outlays over the next 10 years. Those proposals are part of broader cuts to entitlement programs, including:

While there’s little chance that the Trump budget will have much sway in the spending that actually occurs in 2019, the White House has made it abundantly clear where its preferences lie.

The president’s budget says it will achieve its targeted Medicare savings through a host of vague reforms, including improvements to “drug pricing and payment policies,” reductions in fraud and abuse and the elimination of “wasteful spending.” The budget says the proposed changes would extend Medicare’s solvency by eight years.

The budget also calls for eliminating the Medicaid expansion adopted by 32 states and the District of Columbia under Obamacare and proposes new limits on how much health care each Medicaid enrollee can use. It would also transition Medicaid payments from an entitlement system, in which the federal government pays a share of the cost of covering every eligible state resident, to per-person caps or block grants similar to those proposed under the failed Graham-Cassidy health care bill. The changes would allow states to impose tighter eligibility requirements or work requirements that would potentially kick some people out of the program.

Politico calls the Medicare proposals a victory for White House budget chief Mick Mulvaney, “who has begged the president to tackle entitlement spending, including Medicare, since their early days at the White House.” And budget watchdogs welcomed the attention on Medicare spending. “Compared to last year's budget, the focus on controlling Medicare costs is especially important – and the Medicare policies in the budget would all achieve savings by improving efficiency and value of care rather than cutting benefits for beneficiaries,” the Committee for a Responsible Federal Budget said in a blog post.

But critics on the left slammed the spending cuts and were quick to seize on the political opportunity they represent in an election year. “Cutting Medicare to pay for tax cuts for the wealthy is something for Dems to run on,” Dan Pfeiffer, a former adviser to President Obama, tweeted.

As editor in chief, Yuval Rosenberg oversees all aspects of The Fiscal Times' website and email newsletter. His writing has appeared in publications including BusinessWeek, CNBC.com, CNNMoney.com, Fast Company, Fortune, Newsweek, Money and Time.